Yamana Gold : Expands Its Footprint in the Abitibi Region with Friendly Acquisition of Monarch

TORONTO - YAMANA GOLD INC. (TSX: YRI; NYSE: AUY) ('Yamana' or the 'Company') is pleased to announce that it has entered into a definitive agreement (the 'Agreement') with Monarch Gold Corporation ('Monarch') whereby Yamana will acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch not owned by Yamana under a plan of arrangement for consideration, including cash and shares, of approximately C$152 million.

In connection with the plan of arrangement, Monarch will complete a spin-out (the 'Spin-Out') to its shareholders, through a newly-formed company ('SpinCo') of its other mineral properties and certain other assets and liabilities of Monarch (collectively, the 'Transaction').

About Yamana

Yamana Gold Inc. is a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. Yamana plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.

Contact:

Tel: 416-815-0220

Email: investor@yamana.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains or incorporates by reference 'forward-looking statements' and 'forward-looking information' under applicable Canadian securities legislation and within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking information includes, but is not limited to information with respect to the timing and outcome of the Transaction, including required regulatory, court and stock exchange approvals, the anticipated benefits of the Transaction to the parties and their respective securityholders, anticipated strategic and growth opportunities and the anticipated timing of completion of the Transaction. Forward-looking statements are characterized by words such as 'plan', 'expect', 'budget', 'target', 'project', 'intend', 'believe', 'anticipate', 'estimate' and other similar words, or statements that certain events or conditions 'may' or 'will' occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and security holder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction, other expectations and assumptions concerning the Transaction changing; as well as those risk factors discussed or referred to herein and in the Company's Annual Information Form filed with the securities regulatory authorities in all provinces of Canada and available at www.sedar.com, and the Company's Annual Report on Form 40-F filed with the United States Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements.